Lower home prices hint of buyers’ market

A tight economy persists, but residential real estate prices are shifting as sellers attempt to attract buyers and distressed property influences the market.

Home sales increased 13.4 percent between May 2010 and the same month this year, according to the National Realtors Association. It was the first month since April 2010 that contract activity was above year-ago levels and showed a monthly increase that was the strongest since November 2010 levels at a 10.6 percent offered a boost from the same month in 2009.

“Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” NAR chief economist Lawrence Yun said in a printed statement.

Statistics provided by CoreLogic show that while sales increased, overall home prices in the Houma-Thibodaux Metropolitan Statistical Area declined by 1.27 percent in May compared to the same month in 2010. Excluding distressed sales, those that sold due to foreclosure or at extremely reduced levels, prices on new and existing homes actually yielded a year-to-year price increase of 2.64 percent.

Houma Town and Country Realtor Michelle Parsons said she had not noticed any significant changes in market prices or sales during the past 12 months,” It’s about the same,” she said.

Patterson Real Estate broker Ron Brooks characterized the home selling market as soft. “It’s better than January and February, but still we’re under performing based on historical precedent,” he said.

Nationally, May to May prices on residential real estate, excluding distressed property, was down 0.4 percent. Louisiana listed a 1 percent increase given the same criteria.

By parish, Louisiana average home prices ranged from a high of $570,000 in Tensas Parish to a low of $69,000 in La Salle Parish. In the Tri-parish region, average home prices list at $138,000 in St. Mary, $194,000 in Lafourche and $205,000 in Terrebonne.

CoreLogic chief economist Mark Fleming said repeated month-over-month growth and strength in the non-distressed market are positive signs for real estate movement. “Slowly declining shadow inventory and stabilized negative equity levels are also signs,” he said. “Nonetheless, the fragile economic recovery is still critical to the long-term recovery in the housing market.”

“Current housing market activity indicates a very slow pace of broader market activity, but recent reversals in oil prices are likely to mitigate the impact going forward,” Yun said. “The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”

“It seems to me that the foreclosures and bankruptcies have peaked and seem to be going down noticeably in the last month,” Brooks said. “I am a little encouraged. The challenges are many from the standpoint that the lenders are being beaten up with changing rules and regulations as we see the financial markets being overhauled and regulated. It’s tight.”